he only alters his behavior to the minimum of what the instructions imply, which makes difficult to justify why his actions are unacceptable.
A concept I'm already introducing to my 2 year old is "pushing the limit." It's not a serious problem yet but I'm trying to nip it in the bud by pointing it out to her, so that she a) starts to develop a concept of what I mean by that and b) knows that I'm on to her, and gets a reality check about the transparency of her "sneakiness." The next step is making it clear to her that "pushing the limit" is itself a behavior that is not acceptable.
Depending on the age and comprehension level of the child, my inclination is to deal with the arguing (e.g. about not being able to take the bat through the livingroom) by getting quiet and serious, and asking, "Do you really not understand the difference? Because I can explain it to you. Or are you just wanting to argue?"
This is actually a technique I picked up from teaching undergraduates!
If you have something to say that they don't want to hear, don't just start saying it. First you have to get their buy-in to listen to you, or else they have to admit that they aren't interested in listening to you.